Bad US timing in Africa as Resource war is in full swing

As Obama makes his first real appearance in Africa, has he come far too late? As the president touched down in South Africa, he was greeted with more welcoming protests than the warmth he may have encountered on his trip to the G8 summit in Northern Ireland.

Africa itself is the new Jewel in the eye of slowing down major economies in the northern Hemisphere and where strategic economics may now work with African ways of life, which was unheard of back in the 80s-90s. Holding vast realms of natural resources and economies egger to grow, China has been making the most progress out of all nations, though has also been finding out, that Africa is not always easily bought and tapped.

Late jump from the gate

The Current Obama administration did not make an appearance in its last term, and through this the US has been living off the success of the Clinton administration’s duty free policy on African goods and the Bush administration’s poverty donations, though there is still nothing yet from Obama.

As he was escorted through Cape town in his usual armed battalion, including the support of the South African’s catalogue of Gorilla proof Jeeps, the president had come at a time of when millions of the continent’s inhabitants prepared for the mourning of Nelson Mandela, as well the general view of that Barak Obama “Another US President”. This comes from the Geo political position most south Africans see Mr Obama lying in. From the Libya Crisis and toppling of the Gaddafi regime last year, the involvement of more US drone aircraft in Africa and the current interactions and geopolitical moving in Syria.

Contractual ease by China

China has been conducting much more investment, as it saw the emptiness of foreign competition implementing strategy on the continent. China is finding it easy business doing deals in Africa, as a pragmatic position is taken for politics. There are no political improvements linked to any investment deal which may include a more stable government as some nations saw with previous western deals, giving much better political face to china.

Also with weak colonial might at the moment, no one is in the position to lecture China on its resource and foreign investment policies at this current time. Also with the increase of inflation in China, it is only be a matter of time until manufacturing is transferred overseas to Africa in order to reduce production costs.

Though making deals with Zimbabwe and Sudan hasn’t helped other sides of Chinese interests and shows more importance to business relationships than China’s social responsibility.

DIY Africa

The main issues with Africa are usually down to a few big factors where one or more is active:

• Political Corruption
• Civil Unrest
• Inadequate Infrastructure

The oil industry is probably the wisest of the high risks from African operations. Companies such as BP and Exxon Mobil have dealt with losing oil wells due to political tensions, such as in Somalia; workers being captured and ransomed off and the sabotage from local greed and jealousy, which is the most interesting one in my opinion.

In Nigeria a local communities jealousy over another that has a well contract from an oil firm, will usually result in pipes being cut, or well heads being set ablaze. The market for D grade black market oil is then created through tribal gangs stealing the unrefined liquid and in the meantime the environment being damaged. With Nigeria cultures you are taught not to share or help, so other communities do not work together. The only cooperative relationship that usually occurs is when cleaning companies pay gangs to destroy wells in order to get cleaning contracts.

Energy shortages are also a major issue. Known for its mass ownership of electric generators, Africa’s civil infrastructure is in desperate need of being created.

The Future

 

 

There are certain countries such as South Africa and Angola which provide a forward vision for the Continent, with maybe only one of the three issues being faced.

As the US ranks third as trading partner to the continent, it will be rather soon that more foreign direct investment moves swiftly in. This is also contributed to the the reduction in global market liquidity seen in the past weeks, on the basis of changing Central banking monetary policy (mostly from the US) and the predicted slowdown in emerging markets. Africa due to its minerals has not experienced a reduction in investment hunger so much and with still a very large gap in market capacity across the board of sectors from resource extraction to government development projects, whilst the northern boundary has the rope pulled tighter, the centre realms of the equator look promising, just how much for Africa and more so, how will the economic transition process effect Political engineering and efficiency? This issue brought up when Libya was still continuing in conflict.

 

Tata

G.E.

Die Hard Economics vs Bitcoin

Whilst changing to a connecting flight in Zurich, one overheard from the men’s wash basin that “John McLane from Vienna is asked to make his way and board his connecting flight to Miami”, the thoughts of mass panic and chaos swelled into the Gothic Economist’s mind. Gliding out of the bathroom, with the swing of a Black aluminium case and looking like the perfect 21^st century terrorist with some electronic body dance moves thrown in. He thought to himself; where would John McLane be needed soon?

The word Bitcoin very few may of heard up until recently, when it’s price surged from 11$ in 2011 to over 200$ this year. The fundamental laws that govern this virtual currency are beautiful, from freedom, to the potential downfall spike of a financial market.

The Dark Past

No one knows who the creator or creators of this virtual copper really are… Though tales are told in the Far East; and it is said to have originated from a hacking liberal collective known as Satoshi Nakamoto. This possible origin inspires the use of Bitcoin as pure freedom, so in a way this would make sense for its origin. But trusting the algorithmic workings of a hacking community for  what is now by investors seen as a very real object in the currency market, for me does spark concerns. More so are these concerns set ablaze with the value of this virtual coin being at over the $100 apiece.

No Monetary Policy, No Problem

If you are loathing of central banks and the continuous tax avoidance cleansing has rattled you to the puzzlement. The trust of your wealth management intermediary is in question? Then look no further!

The currency, being digital is not guaranteed or controlled by anything up to the heavens other than the free market. Hence for tax avoiders and people looking to acquire new safe havens, Bitcoin could prove to be fruitful. The work which occurs within Bitcoin is supply increase. There is cap currently on the currency until 2050, but until then it is up to you to solve algorithmic puzzles in order to win a few of the coins, by downloading ‘Bit miner’

Taxation & Stealth

Her majesty’s government met with figures from taxation to the online intelligence service (GCHQ), in order to discuss the problems of the new coin.

The central problem which the UK government and many others become sour at, is the notion that Bitcoin is near completely untraceable in transaction origin, and is impossible for any governing body other than the demand & supply of the free market to control. These founding rules have made this meeting turn to the operation of most likely bending these two main principles and eventuallz when they are bent, or with the help of some other countries broken, then taxation will be most likely to occur.

Uses and Commodity problems

Currently the uses of the coin movements are speculative and most likely large untraceable transactions, though rapidly online shops and services that are beginning to accept it. The only current backaches are the fears of Bitcoin becoming a commodity currency. The limiting factors of algorithms prove a big issue in dealing with this.

The coin I believe is a great step into the new way the world now works as more transactions become electronic. The frustrations I believe will come as countries try to file away at these, and then Bitcoin may take a turn for the worse.

So as we see that governments try their best to cling onto the new ounces of digital power, how will they send John McLane in, even if he ends up on the wrong side? Possibly using the powers of Tron, he will visualise into an arcade game and with 8 Bit explosions and Tetris pack punches he will fight the new virtual blanket of crime. At least Sir Mervyn King can now breath easily, that these and the remaining issues of monetary policy are not his problem anymore...Please insert coin here^^

February Gothic Viewpoint

The far outcries of a weary Britain’s Triple – A downgrade, and the far reaching wails of a Banshee that stay echoing with a once dominant oil giant could be the marks of February 2013, which Economics nerds remember.

Apart from that the dear lust I have in returning to the desolate sector which I call short-term trading. Research and hunger for a weakened Sterling drives me into vast array that this is 2013 and yes people need to be proactive in objects other than chess, in order to survive the Darwinian rules of life.

Iran goes Keynesian

For me, yes I will remember it for these two things, plus Iran’s new adventurous plans for 20 new uranium rich reactors.

Iran’s strategy of its announcement on the new nuclear reactor plans, may pay off in the long term. The strong decisions that Iran will not back down, regardless of international pressure on its nuclear programme as a known Islamic radical state, could pave the wave for new balance of payments to enter the country. Looking at in terms of the size of Iran, one could easily assume that Iran will have a power production surplus in cheap electricity, which could be provided to an oil dependent power consuming gulf.

As much as its nuclear programme is seen as a major threat to Israel and other nations, it could bring forth a new frontier of gulf power. Iran could enrich nuclear weapons, but instead it is taking positive approach in order to combat economic sanction bestowed upon them.

Wireless momentum

At the moment there are two groups pushing forward for one next big thing in world electronic devices. The ability to charge battery powered devices wirelessly from the handheld mp3s and smartphones, to the 12V battery in your car. The ‘Wireless power consortium’ and ‘Power matters’ alliances are the two big groups pushing this forward and competing. A future billion € industry that will maybe see the combination is well with wireless signals in order to keep the spectrum of signals generic and together, as the invisible spectrum gets more and more stuck together.

Only Fools and horses – The Long view

Well apart from the horse meat scandal. Some other people have silver lined their pockets in an array of marvelous moves within the economy.

As the currency attacks become far greater on central banks, deemed by hedge & Pension fund managers as being the new innocent flesh to be cleaned from bones, a sudden eye takes a glimpse where does it go from here?

Well with dilution in the power of central banks, the multiplier effect of virtual power transfers over to the hedge funds at a smiling rate, as they know after the submission of Bank of England to the new round of QE, they will easily take bets on world recession part II.

The Gothic Viewpoint

The central bank may take an extreme monetarism approach to curb the economy as economic collapse may look inevitable, pressing the political side of the coin in to reduce tax receipts in the short-term, in order to reduce the downturn in a rise in central bank interest rates. The proposal seems more to create a wave of laughing amongst some readers. But think of Europe in particular, what options are left before part II is not prophecy anymore?

So the Banshee has not given up yet haunting the tickers at the world indices and another wave of gothic worthy financial depression I may get to rant about. But one thing is for certain, that humans do become innovative, and are able to find ways to adapt to constraints. Well that’s the nice way to put it… now to listen to Rome!

Tata

Gothic Economist

The beautiful Economy

Friday marked the UK seeing negative growth again, letting flow wonderful politics into a more aching country of why the economy does not work the way people want it to...



















More onto bigger things in the world... Switzerland played host to the world economic forum, where the UK was on the firing line at trying to explain what their position for the future will hold with themselves and the very patient European Union. The UK is currently doing it's utmost to have special privileges given to itself in order that it can remain in the EU without having all the new sanctions put in place that every other member state will have implemented into their infrastructure. Though obviously this is very unlikely to happen, France took a firm root of describing the UK wanting an a la carte menu, where as Germany's foreign minister took a light cherry picking expression instead. Regardless of this the current UK ruling conservative party is leaving this to a referendum of 2017, but what companies in the UK do not need right now is uncertainty. Already financial institutions are seeking possible new bases in Frankfurt for new european operations as the 'City' now looks less of a stronghold for profitable conduction of business.

The US itself produced stress at the beginning of the year with it's comedy styling debt ceiling. The strain of the ceiling's pressure and stress on the markets could be eased if the policy was altered to allow the Federal reserve to borrow above the limit, whilst the US congress decides on which policy implementations to support it. I highly doubt that congress will let the US default on it's debts; it is as likely as me going to sleep in latex after a night out. Possible, but highly uncomfortable as much as I may not want to get out of it!

Onto the future... China and Japan seemed to have announced that they will attempt to build new relations with each other, though in the eye of beholder this will stay continue to remain a brewing cauldron.

The tale of two Islands in Asia

We are a week into the glimpse of China's new management board, upon the stage for China, seven suits encased with red ties stood before the world.

Mr Xi Jinping is now leader of an >80m Chinese communist party with his six new team members at the helm also, however attending the congressional announcement was former president Jiang Zemin. He was there for one reason only, to reassure the world, that as much pressure china's political system is under to become democratic, it will not cease. Mr Jiang actually got more attention due to this, compared with the new president at the congressional announcement, as Mr Xi is seen to be more open in a rational sense to changes within the political system.

This would be honey to the ears of Japan, as it announces it largest trade deficit with China, and this is not due to organic economic slowdown, it is down to a bunch of islands that Japan purchased. This has now led to negative growth in nearly two quarters, ergo Japan will be declaring a recession. Though even with a slightly easier going president, that's not to say members of the old school are not present in the other six.

Going to Behavioural and Strategic impact. The US has taken a very notoriously cunning step and in some ways it will overall benefit China. The US shifted the fire-power of 40,000 troops to conduct exercises   in the area, in a mutual indication to China, that it would standby Japan to defend it's territory, as Japan and the US have a treaty on defence of each other.
However at the same time, the US will now be overtaking Japan as largest export partner to China. So throwing a few 40,000 troops in an area to keep Japan happy for a while, whilst you take over their trading position is quite a good deal.
But it is just not the US that are conducting strategic positioning  China is producing bilateral trade agreements with South Korea, so to anyone's guess, economic pressure is fully being exerted onto the sword of the samurai. In return Japan is attempting trade agreements with the EU and Australia, regardless it will loose out.
Though it's not all sunshine and butterflies for the red flowers.
China's investor arms are going into the emerging markets, as western traders start getting bullish with their Chinese weighted portfolios. They seek non domestic protection, and as much as China racks on more tax incentives and lifts investment barriers, non of this is being seen to make a world of good; only behavioural investment sense of desperation, just making traders increase their bet values against China.

So China is plotting the downfall or economic suicide of Japan with its sustainable deficit of +200% of GDP.
Though it could be worse... You could be Greece, having to deal with your politicians not agreeing with the death dealers aka IMF and the EU, which just entered negative growth also. http://www.ft.com/intl/cms/s/2/0a35504a-0615-11e1-a079-00144feabdc0.html#axzz2CnY7xTPX

Whilst you then have to watch energy companies pay fines, of larger sums that what your country so desperately needs.
http://www.ft.com/intl/cms/s/0/555fa13c-2f46-11e2-8e4b-00144feabdc0.html#axzz2CnY7xTPX

Positive economics combined with the church of monetarism and Hayek. It lacks so much irrational emotion in these scaring areas, its hard to believe this is how economies work the best!!

Tata for now... GE